Condensed Consolidated Statement of Comprehensive Income Quarterly report on unaudited consolidated results for the year ended 31 December 2017

Transcription

1 MMC Corporation Berhad (30245-H) Page 1 of 29 Condensed Consolidated Statement of Comprehensive Income Quarterly report on unaudited consolidated results for the year ended 31 December months 3 months Cumulative Cumulative ended ended 12 months ended 12 months ended RM'000 RM'000 RM'000 RM'000 (Unaudited) (Audited) (Unaudited) (Audited) Revenue 1,234,704 1,852,095 4,160,095 4,627,388 Cost of sales (812,058) (1,207,227) (2,608,675) (2,861,988) Gross profit 422, ,868 1,551,420 1,765,400 Other operating income - items relating to investments 65,718-65, others 51,775 22, , ,477 Administrative expenses (201,012) (178,190) (722,019) (677,713) Other operating expenses (108,927) (114,069) (360,908) (368,440) Finance costs (131,528) (121,467) (491,205) (488,078) Share of results of: - associates 3,849 37, , ,218 - joint ventures 82,511 14,302 99,721 74,878 Profit before zakat and taxation 185, , , ,742 Zakat expenses (5,913) (6,871) (5,913) (6,871) Tax expense (85,004) (12,664) (178,370) (64,942) Profit for the financial period 94, , , ,929 Other comprehensive loss Available-for-sale financial assets - fair value (loss)/gain (136) 4,945 8,554 3,681 - disposal (65,410) - (65,410) - Movement in associates' capital reserves 14,145 23,154 14,145 23,154 Remeasurement of defined benefit liability - (619) - (619) Fair value adjustment-cash flow hedge 6,655 66,216 (18,790) 23,687 Currency translation differences (28,715) 25,718 (48,549) 15,140 Other comprehensive (loss)/income for the financial period (73,461) 119,414 (110,050) 65,043 Total comprehensive income for the financial period 20, , , ,972 Profit attributable to: Owners of the Parent 85, , , ,662 Non-controlling interests 9,057 18,035 42,048 51,267 94, , , ,929 Total comprehensive income attributable to: Owners of the Parent 11, , , ,705 Non-controlling interests 9,057 18,035 42,048 51,267 20, , , ,972 Earnings per share attributable to owners of the Parent - Basic (sen) The Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016.

2 MMC Corporation Berhad (30245-H) Page 2 of 29 Condensed Consolidated Statement of Financial Position As at As at RM 000 RM 000 (Unaudited) (Audited) Non-Current Assets Property, plant and equipment 8,192,743 8,239,455 Investment properties 29,337 29,864 Interests in associates 4,527,988 4,558,660 Investments in joint arrangements 553, ,141 Available-for-sale financial assets 3,088 3,352 Inventories 1,861,494 1,734,356 Trade and other receivables 325, ,362 Derivative financial instruments - 5,154 Intangible assets 2,964,383 2,914,441 Deferred tax assets 714, ,377 19,172,819 18,678,162 Current Assets Inventories 118, ,294 Trade and other receivables 2,369,132 2,329,908 Derivative financial instruments 3,868 21,241 Tax recoverable 60,151 42,620 Available-for-sale financial assets - 77,642 Other investment 290, ,263 Deposits, bank and cash balances 698, ,146 3,540,844 3,907,114 Assets held for sale 148, ,228 Total Assets 22,862,117 22,734,504 Equity and Liabilities Equity attributable to owners of the Parent Share capital 2,344, ,506 Reserves 7,182,506 9,228,060 9,526,782 9,532,566 Non-controlling interests 717, ,952 Total equity 10,244,579 10,230,518 Non-Current Liabilities Redeemable preference shares 33,348 50,023 Borrowings 7,477,597 7,551,654 Land lease received in advance 253, ,229 Provision for retirement benefits 17,600 15,486 Deferred income 233, ,465 Deferred tax liabilities 536, ,653 Trade and other payables 311, ,792 8,863,656 8,967,302 Current Liabilities Borrowings 1,347,327 1,494,684 Trade and other payables 2,381,290 1,999,840 Tax payables 1,963 12,843 Deferred income 23,302 29,302 Derivative financial instruments ,753,882 3,536,684 Total Liabilities 12,617,538 12,503,986 Total equity and liabilities 22,862,117 22,734, Net assets per share attributable to owners of the Parent (sen) The Condensed Consolidated Statement of Financial Position should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016.

3 MMC Corporation Berhad (30245-H) Page 3 of 29 Condensed Consolidated Statement of Changes in Equity for the financial year ended 31 December 2017 Attributable to owners of the parent Non-distributable Distributable Available- Currency for-sale Cash Non- Share Share translation Revaluation financial flow hedge Capital** Retained controlling Total capital premium reserve reserve* assets reserves reserves earnings Total interests (NCI) equity RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1 January ,506 2,039,770 98,085 28,120 59,922 31, ,945 6,596,133 9,532, ,952 10,230,518 Transition to no-par value on 31 January 2017 (Note a) 2,039,770 (2,039,770) Net profit for the financial year , ,408 42, ,456 Other comprehensive loss - - (34,404) - (56,856) (18,790) - - (110,050) - (110,050) Total comprehensive (loss)/ income for the financial year - - (34,404) - (56,856) (18,790) - 225, ,358 42, ,406 Acquisition through business combination ,000 9,000 Compulsory acquisition of NCI Dividends paid to non-controlling shareholders (31,203) (31,203) Final dividend in respect of financial year ended 31 December (121,802) (121,802) - (121,802) At 31 December ,344,276-63,681 28,120 3,066 12, ,945 6,700,399 9,526, ,797 10,244,579 Note a With the Companies Act 2016 ("New Act") coming into effect on 31 January 2017, the credit standing in the share premium of RM2,039,770,000 has been transferred to the share capital account. There is no impact on the numbers of ordinary shares in issue of the relative entitlement of any of the members as a result of this transition. Pursuant to subsection 618(3) and 618(4) of the New Act, the Group may exercise its right to use the credit amounts being transferred from share premium accounts within 24 months after the commencement of the New Act. * - The revaluation reserves relates to business combination of a subsidiary prior to the adoption of MFRS. * * - The distributable capital reserves represent mainly the net gain from disposals of investments prior to adoption of MFRS. The Condensed Consolidated Statement Of Changes in Equity should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016.

4 MMC Corporation Berhad (30245-H) Page 4 of 29 Condensed Consolidated Statement of Changes in Equity for the financial year ended 31 December 2016 Attributable to owners of the parent Non-distributable Distributable Available- Currency for-sale Cash Non- Share Share translation Revaluation financial flow hedge Capital** Retained controlling Total capital premium reserve reserve* assets reserves reserves earnings Total interests (NCI) equity RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1 January ,506 2,039,770 83,925 28,120 56,241 (18,015) 374,945 6,167,800 9,037, ,127 9,984,871 Net profit for the financial year , ,662 51, ,929 Other comprehensive income/(loss) ,160-3,681 49,100 - (1,898) 65,043-65,043 Total comprehensive income for the financial year ,160-3,681 49, , ,705 51, ,972 Acquisition of NCI (8,777) (8,777) 7,181 (1,596) Compulsory acquisition of NCI (909) (909) (255,980) (256,889) Liquidation of a subsidiary ,967 5,967 (7,641) (1,674) Dividends paid to non-controlling shareholders (30,002) (30,002) Final dividend in respect of financial year ended 31 December (115,712) (115,712) - (115,712) At 31 December ,506 2,039,770 98,085 28,120 59,922 31, ,945 6,596,133 9,532, ,952 10,230,518 * - The revaluation reserves relates to business combination of a subsidiary prior to the adoption of MFRS. * * - The distributable capital reserves represent mainly the net gain from disposals of investments prior to adoption of MFRS. The Condensed Consolidated Statement Of Changes in Equity should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2015.

5 MMC Corporation Berhad (30245-H) Page 5 of 29 Condensed Consolidated Statement of Cash Flows 12 months 12 months ended ended RM'000 RM'000 (Unaudited) (Audited) Cash flows from operating activities Profit before zakat and taxation 451, ,742 Adjustments for: Non-cash items 450, ,511 Interest expense 491, ,078 Interest income (25,815) (41,085) Dividend income (725) (4,247) Share of results in associates and joint ventures (239,368) (249,096) Operating profit before working capital changes 1,127,110 1,234,903 Changes in working capital: Net change in inventories (34,680) (97,404) Net change in other current assets (286,021) (733,813) Net change in current liabilities 395, ,573 Deferred income Cash generated from operations 1,201, ,385 Designated account and pledged deposits 6,797 (31,252) Tax paid (148,616) (72,638) Zakat paid (5,913) (6,871) Land lease received in advance 15,103 25,706 Retirement benefits paid - (685) Staff loan repaid Net cash generated from operating activities 1,069, ,749 Cash flows from investing activities Net cash outflow from liquidation of a subsidiary - (1,674) Net cash inflow from acquisition of a subsidiary (16,813) - Net cash inflow from disposal of a joint venture 3,941 - Purchase of additional shares in a subsidiary from non-controlling interests - (258,485) Investment in joint ventures (180,800) (10,823) Purchase of property, plant and equipment (437,573) (497,832) Purchase of intangible assets (50,219) (87,934) Purchase of available-for-sale financial assets - (3,688) Proceeds from sale of property, plant and equipment 24,271 92,451 Proceeds from sale of other non-current assets 1, Proceeds from sale of available-for-sale financial assets 86,768 - Interest received 25,815 41,085 Dividend received from: - Associates 163, ,179 - Joint Ventures 49,000 43,500 - Others 725 4,246 Decrease/(increase) in other investments 111,913 (33,217) Net cash used in investing activities (217,767) (573,807) The Condensed Consolidated Statement of Cash Flows should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016.

6 MMC Corporation Berhad (30245-H) Page 6 of 29 Condensed Consolidated Statement of Cash Flows 12 months 12 months ended ended RM'000 RM'000 (Unaudited) (Audited) Cash flows from financing activities Repayment of term loans (832,894) (945,772) Drawdown of term loans 580,142 1,272,134 Dividend paid (121,802) (115,712) Dividend paid to non-controlling interests of subsidiaries (31,203) (30,002) Interest paid (491,205) (488,078) Redemption of preference shares in a subsidiary (22,810) (22,810) Net cash used in financing activities (919,772) (330,240) Net decrease in cash and cash equivalents (68,293) (152,298) Effects of changes in exchange rate (48,549) 15,140 Cash and cash equivalents at beginning of financial period 790, ,052 Cash and cash equivalents at end of financial period 674, ,894 Cash and cash equivalents comprise: Deposits and bank balances 988,857 1,224,409 Less: Deposits with maturity more than 90 days (290,350) (402,263) 698, ,146 Designated accounts (23,906) (31,252) Pledge deposits (549) - 674, ,894 The Condensed Consolidated Statement of Cash Flows should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2016.

7 MMC Corporation Berhad (30245-H) Page 7 of 29 Notes to the interim financial statements 1. Basis of preparation The interim financial statements are unaudited and have been prepared in accordance with Malaysian Financial Reporting Standards ("MFRS") 134, Interim Financial Reporting and Appendix 9B (Part A) of the Listing Requirements of Bursa Malaysia Securities Berhad. The interim financial statements should be read in conjunction with the Group s annual audited financial statements for the financial year ended 31 December The audited financial statements of the Group for the financial year ended 31 December 2016 were prepared in accordance with MFRSs, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The significant accounting policies and methods adopted in these interim financial statements are consistent with those adopted in the most recent annual audited financial statements for the financial year ended 31 December The Group adopted the following Amendments to MFRSs effective for annual period beginning on or after 1 January 2017 as follows: Amendments to MFRS 12 Disclosure of Interests in Other Entities Amendments to MFRS 107 Statement of Cash Flows - Disclosure Initiative Amendments to MFRS 112 Income Taxes - Recognition of Deferred Tax Assets for Unrealised Losses

8 MMC Corporation Berhad (30245-H) Page 8 of 29 The adoption of the above did not have any material impact on the financial statements of the Group in the period of application. Malaysian Accounting Standards Board had issued the following new standards which are effective for the financial periods: (i) Financial year beginning on or after 1 January 2018: MFRS 9 Financial Instruments MFRS 15 Revenue from Contracts with Customers Amendments to MFRS 2 Share-based Payment - Classification and Measurement of Share-based Payment Transactions Amendments to MFRS 4 Insurance Contracts - Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts Amendments to MFRS 128 Investments in Associates and Joint Ventures Amendments to MFRS 140 Investment Property - Transfers of Investment Property IC Interpretations 22 Foreign Currency Transactions and Advance Consideration (ii) Financial year beginning on or after 1 January 2019: MFRS 16 Leases (iii) Date yet to be announced by MASB: Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investment in Associates and Joint Ventures - Sale or contribution of assets between an investor and its associates/joint ventures. The effective date of these amendments had been deferred and yet to be announced by the Malaysian Accounting Standards Board.

9 MMC Corporation Berhad (30245-H) Page 9 of 29 The Group did not early adopt the aforementioned new standards and is currently assessing its impact. 2. Audit qualification The report of the auditors on the Group s financial statements for the financial year ended 31 December 2016 was not subject to any qualification. 3. Seasonal or cyclical factors The Group s operations have not been affected by seasonal or cyclical factors. 4. Unusual items There was no unusual item affecting assets, liabilities, equity, net income or cash flows during the current quarter under review because of their nature, size and incidence. 5. Changes in estimates There was no material change in financial estimates reported in prior interim periods that could materially affect the current interim results. 6. Debt and equity securities There was no issuance, cancellation, repurchase, resale and repayment of debt and equity securities during the current quarter ended 31 December 2017.

10 MMC Corporation Berhad (30245-H) Page 10 of Dividend paid In respect of the financial year ended 31 December 2016, a final single-tier dividend of 4.0 sen per ordinary share of RM0.10 each on 3,045,058,552 ordinary shares amounting to RM121,802,342 was paid on 4 July Segment Reporting a) Current Quarter Ended 31 December 2017 (3 months) QTD Ports & Logistics Energy & Utilities Engineering & Construction Investment Holding, Corporate Others Total Gas Energy RM mil RM mil RM mil RM mil RM mil RM mil Revenue Total ,318 Inter-segment (7) - - (76) - (83) External ,235 Results Profit/(loss) before zakat and taxation (62) 185 Finance costs Depreciation and Amortisation EBITDA* QTD Revenue Total ,902 Inter-segment (3) - - (47) - (50) External ,852 Results Profit before zakat and taxation Finance costs (2) Depreciation and Amortisation EBITDA* *EBITDA Earnings/(loss) before interest, tax, depreciation and amortisation.

11 MMC Corporation Berhad (30245-H) Page 11 of 29 b) Current Financial Year Ended 31 December 2017 (12 months) FYE Ports & Logistics Energy & Utilities Engineering & Construction Investment Holding, Corporate Others Total Gas Energy RM mil RM mil RM mil RM mil RM mil RM mil Revenue Total 2, , ,367 Inter-segment (12) - - (195) - (207) External 2, , ,160 Results Profit/(loss) before zakat and taxation (392) 452 Finance costs Depreciation and Amortisation EBITDA* 1, (34) 1,404 FYE Revenue Total 2, , ,700 Inter-segment (14) - - (59) - (73) External 2, , ,627 Results Profit/(loss) before zakat and taxation (318) 673 Finance costs (1) Depreciation and Amortisation EBITDA* 1, ,613 *EBITDA Earnings/(loss) before interest, tax, depreciation and amortisation.

12 MMC Corporation Berhad (30245-H) Page 12 of Property, plant and equipment There was no revaluation of property, plant and equipment during the current quarter ended 31 December Material events subsequent to the end of current interim period a) On 11 January 2018, MMC Utilities Holdings Sdn Bhd and MMC Rail Ventures Sdn Bhd, wholly-owned dormant subsidiaries of MMC Corporation Bhd ( MMC ), have submitted their applications to the Companies Commission of Malaysia ( CCM ) to strike off their names from the register of CCM pursuant to Section 550 of the Companies Act, 2016 ( Proposed Striking Off ). The Proposed Striking Off is not expected to have any significant financial and operational impact on MMC Group for the financial year ending 31 December b) On 16 January 2018, MMC Zelan Sdn Bhd ( MMCZ ), a 60%-owned subsidiary of MMC, has passed a special resolution to windup MMCZ vide members voluntary liquidation pursuant to Section 439(1) (b) of the Companies Act, 2016 ( Liquidation ). The Liquidation will not have any material effect on the earnings, net assets and gearing of MMC Group for the financial year ending 31 December 2018.

13 MMC Corporation Berhad (30245-H) Page 13 of Changes in composition of the Group On 4 October 2017, MMC had completed the acquisition of 7,000 Ordinary Shares representing 70.0% ordinary equity interest and 4,990,000 Irredeemable Convertible Cumulative Preference Shares ( ICCPS ), in Tanjung Bruas Port Sdn. Bhd. (formerly known as KMB Seaport Sdn. Bhd.) from Seaport Management Services Sdn Bhd for a cash consideration of RM21.0 million. MMC had on even date nominated MMC Port Holdings Sdn Bhd ( MMC Port ), its whollyowned subsidiary, as the transferee to hold the 7,000 Ordinary Shares and 4,990,000 ICCPS. The following summarizes the amounts of assets and liabilities recognised at the acquisition date: Book Value Fair Value RM'000 RM'000 Receivables 2,609 2,609 Intangible assets 5,130 33,610 Cash and bank 4,187 4,187 Payables (3,591) (3,591) Deferred taxation - (6,815) Total identifiable net assets 8,335 30,000 Non-controlling interests (9,000) Cash consideration paid 21,000 Net cash outflow arising from acquisition of a subsidiary: Cash consideration paid 21,000 Less: Cash and cash equivalent of subsidiary acquired (4,187) Net cash outflow to the Group on acquisition 16,813

14 MMC Corporation Berhad (30245-H) Page 14 of 29 Save as disclosed above, there was no change in the composition of the Group for the current quarter ended 31 December Changes in contingent liabilities or contingent assets There was no change in contingent liabilities or contingent assets since the last audited financial statements for the financial year ended 31 December 2016 except for the following bank guarantees issued to third parties: RM mil RM mil Subsidiaries Bank guarantees issued to third parties are mainly in relation to performance bonds and payment guarantees for utilities facilities.

15 MMC Corporation Berhad (30245-H) Page 15 of Provision of financial assistance Pursuant to paragraph 8.23(1)(ii) of Bursa Securities Listing Requirements, the financial assistance provided by MMC is as follows: a) MMC and Gamuda Berhad ( Gamuda ) joint venture was awarded the Underground Works Package for the Klang Valley Mass Rapid Transit ( KVMRT ) Sungai Buloh-Kajang ( SBK ) Line in MMC and Gamuda then established a joint venture company known as MMC Gamuda KVMRT (T) Sdn Bhd, a special purpose vehicle ( SPV ), to undertake the underground works package with each holding 50% interest. As required under the award, MMC and Gamuda have issued Parent Company Guarantees to guarantee the due performance and obligations of the SPV. b) On 13 July 2015, MMC and Gamuda s jointly-controlled entity, MMC Gamuda KVMRT (PDP SSP) Sdn Bhd, a SPV with each holding 50% interest, executed the Project Delivery Partner (PDP) Agreement for the KVMRT Sungai Buloh-Serdang-Putrajaya ( SSP ) Line. As required under the award, MMC and Gamuda have issued Parent Company Guarantees to guarantee the due performance and obligations of the SPV. c) On 31 March 2016, MMC Gamuda KVMRT (T) Sdn Bhd, a jointlycontrolled entity of MMC and Gamuda, has been awarded the Underground Works Package for the KVMRT SSP Line. As required under the award, MMC and Gamuda have issued Parent Company Guarantees to guarantee the due performance and obligations of the SPV. As at reporting date, the aforementioned guarantees have not been called as the SPVs are fulfilling their performance and obligations required under the Projects.

16 MMC Corporation Berhad (30245-H) Page 16 of Capital commitments Capital commitments of the Group not provided for in the interim financial report are as follows: RM mil RM mil Property, plant and equipment: Authorised and contracted for Authorised but not contracted for ,

17 MMC Corporation Berhad (30245-H) Page 17 of 29 Additional information required by the Bursa Securities Listing Requirements 15. Review of performance a) Current quarter compared with the corresponding quarter of the preceding year (three-months) For the quarter ended 31 December 2017, the Group recorded RM1,234.7 million in revenue, a 33.3% decrease from RM1,852.1 million reported in the corresponding quarter ended 31 December 2016 mainly due to completion of KVMRT- SBK Line in 2016 and no sale of land in respect of the overall development of Senai Airport City ( SAC ), moderated by higher work progress from KVMRT-SSP Line. The Group's Profit before zakat and taxation decreased to RM185.0 million compared with RM305.0 million reported in corresponding quarter ended 31 December 2016, mainly due to no sale of land at SAC, completion of KVMRT-SBK Line and higher share of losses from Zelan Berhad ( Zelan ) arising from impairment of receivables, offset by gain on disposal of equity securities and higher work progress from KVMRT- SSP line.

18 MMC Corporation Berhad (30245-H) Page 18 of 29 b) Current financial year compared with the preceding financial year (twelve-months) For the financial year ended 31 December 2017, the Group recorded RM4,160.1 million in revenue, a 10.1% decrease from RM4,627.4 million reported in the preceding financial year, mainly due to completion of KVMRT-SBK Line in 2016 and no sale of land in respect of the overall development of SAC. These were moderated by completion work progress from KVMRT- SSP Line and Langat Sewerage Treatment project, coupled with higher contribution from Pelabuhan Tanjung Pelepas ( PTP ) and Johor Port Berhad ( JPB ). The Group s Profit before zakat and taxation decreased to RM451.7 million compared with RM672.7 million reported in the preceding financial year, mainly due to the following: i. One-off provision for impairment of RM98.0 million on SMART as a result of lower projected traffic volume; ii. iii. Completion of KVMRT-SBK Line; and No sale of land at SAC. These were compensated by: i. Higher contribution from KVMRT-SSP Line; ii. iii. Gain on disposal of equity securities; and Share of profit from Penang Port Sdn Bhd ( PPSB ) and recognition of negative goodwill of RM44.2 million arising from acquisition of 49% equity stake in PPSB. Ports & Logistics The segment recorded revenue of RM2,816.9 million, an increase of 3.0% compared with RM2,735.1 million reported in the preceding financial year, due to higher contribution

19 MMC Corporation Berhad (30245-H) Page 19 of 29 from PTP and RAPID Material Offloading Facilities ( RAPID MOLF ) operations at JPB, offset by lower container volume handled at Northport (Malaysia) Bhd ( NMB ). The segment recorded increase in Profit before zakat and taxation by RM27.3 million to RM484.0 million compared with RM456.7 million reported in the preceding financial year due to higher contribution from JPB, share of profit from PPSB and recognition of negative goodwill. These were offset with lower volume handled at NMB. Engineering & Construction The segment recorded revenue of RM1,264.8 million, a decrease of 16.3% compared with RM1,511.9 million reported in the preceding financial year. The decrease was mainly to completion of KVMRT-SBK Line, offset by progress from KVMRT- SSP Line and Langat Sewerage Treatment project. The segment recorded decrease of 43.3% in Profit before zakat and taxation to RM198.0 million from RM348.9 million reported in the preceding financial year, mainly due to oneoff provision for impairment of RM98.0 million on SMART and completion of KVMRT-SBK Line, compensated by progress from KVMRT-SSP Line. Investment Holding, Corporate & Others The segment recorded revenue of RM78.4 million, a decrease of 79.4% compared with RM380.3 million reported in the preceding financial year mainly due to no sale of land in respect of the overall development of SAC. The segment recorded higher Loss before zakat and taxation by RM74.1 million to RM391.8 million compared with RM317.7 million reported in the preceding financial year due to no

20 MMC Corporation Berhad (30245-H) Page 20 of 29 sale of land at SAC, offset by gain on disposal of equity securities. 16. Variation of results against immediate preceding quarter The Group recorded higher Profit before zakat and taxation of RM185.0 million in the current quarter compared with RM69.7 million in the immediate preceding quarter mainly attributed to absence of one-off provision for impairment on SMART of RM98.0 million, gain on disposal of equity securities and recognition of negative goodwill arising from acquisition of 49% equity stake in PPSB, offset by higher share of losses from Zelan and absence of forfeitured deposit on land sale transaction at SAC. 17. Current prospects The Group remains positive of its prospects driven by improving performances of its operating companies together with contribution from on-going construction projects. Ports & Logistics division is expected to register higher revenue across all the ports. The completion of 49% acquisition in Penang Port Sdn Bhd ( PPSB ) and the proposed acquisition of the remaining 51% equity interest is expected to contribute positively to the Group s future earnings as it allows full consolidation of PPSB as a wholly-owned subsidiary. The acquisition allows the Group to establish a strong foothold in the Northern region of Peninsular Malaysia and complement the Group s strategic presence throughout the Straits of Malacca. Operational and cost synergies driven by MMC, would further enhance the financial performance of its Ports & Logistics division.

21 MMC Corporation Berhad (30245-H) Page 21 of 29 The Energy & Utilities division will continue to contribute positively from the Group s associated companies, namely Malakoff and Gas Malaysia. Substantial existing order-book provides earnings visibility for the Engineering & Construction division anchored by the KVMRT-SSP Line underground work and Project Delivery Partner (PDP) role for elevated portion. Furthermore, the earnings contribution from Engineering & Construction division will be sustained by on-going projects namely Langat 2 Water Treatment Plant, Langat Centralized Sewerage Treatment Project and our involvement in the PDP role for Pan Borneo Sabah Highway. 18. Profit before zakat and taxation Profit before zakat and taxation is stated after (crediting)/charging the following items: 3 months 3 months Cumulative 12 Cumulative 12 ended ended months ended months ended RM mil RM mil RM mil RM mil (Unaudited) (Audited) (Unaudited) (Audited) Interest income (7.0) (10.9) (25.8) (41.1) Depreciation Amortisation Impairment of receivables Net unrealised foreign exchange (gain)/loss - (8.1) Loss/(gain) on disposal of: - property, plant and equipment (60.2) - other investment (65.7) - (65.7) - Reversal for litigation costs - (21.9) - (21.9)

22 MMC Corporation Berhad (30245-H) Page 22 of Profit forecast or profit guarantee The Group did not issue any profit forecast or profit guarantee for the reporting period in a public document. 20. Tax expense Cumulative 12 months ended Cumulative 12 months ended 3 months ended 3 months ended RM mil RM mil RM mil RM mil Current tax expense - current (13) (56) (86) (95) - prior years (40) (18) (32) (18) Deferred tax expense - current (32) 61 (60) 48 (85) (13) (178) (65) The Group s effective tax rate for the quarter ended 31 December 2017 was higher than the statutory income tax rate principally due to effect of non-deductible expenses for tax purposes and under provision of prior years tax. 21. Status of corporate proposals announced Save as disclosed below, there is no other corporate proposal announced but not completed up to the date of this announcement. (i) On 19 January 2017, MMC announced that its wholly-owned subsidiary, MMC Technical Services Sdn Bhd ( MMC TSSB ), had entered into a share purchase agreement ( MMCOG SPA ) with Melati Pertiwi Sdn Bhd ( Melati Pertiwi ) for the disposal of its 100% beneficial interest in MMC Oil & Gas Engineering Sdn Bhd by MMC TSSB to Melati Pertiwi, for a cash consideration of RM50.0 million subject to the terms and conditions contained in the MMCOG SPA.

23 MMC Corporation Berhad (30245-H) Page 23 of 29 On 21 April 2017, MMC announced that on the same day, MMC TSSB and Melati Pertiwi had, by way of a letter, mutually agreed to extend the cut-off date to 20 October On 20 October 2017, MMC announced that MMC TSSB and Melati Pertiwi had, by way of a letter ( Extension Letter ), mutually agreed to extend the cut-off date to 19 April Pursuant to the Extension Letter, MMC also announced on the same day that Melati Pertiwi, as at 20 October 2017, had paid a total sum of RM19.9 million to MMC TSSB, being part payment of the consideration (inclusive of RM5 million deposit). The remaining balance of the consideration of RM30.1 million shall be paid by Melati Pertiwi on the completion of the MMCOG SPA. (ii) On 3 April 2017, MMC announced that its wholly-owned subsdiary, MMC Port Holdings Sdn Bhd ( MMC Port ), had entered into a conditional share sale and purchase agreement ( 51% SPA ) with Seaport Terminal (Johore) Sdn Bhd ( STJSB ) to acquire the remaining 37,459,501 ordinary shares in Penang Port Sdn Bhd ( PPSB ), representing approximately 51.0% ordinary equity interest in PPSB for a cash consideration of RM220.0 million subject to the terms and conditions contained in the 51% SPA ( Proposed 51% Acquisition ). On 27 April 2017, MMC issued a Notice of the Extraordinary General Meting ( EGM ) and a Circular to Shareholders in relation to the Proposed 51% Acquisition. On 11 May 2017, MMC announced that the non-interested shareholders of MMC had, at the EGM, approved and passed the resolution set out in the Notice of EGM dated 27 April 2017.

24 MMC Corporation Berhad (30245-H) Page 24 of 29 On 11 October 2017, the parties had, by way of a letter, mutually agreed to extend the period to satisfy or waive the conditions precedent in the 51% SPA up to and including 10 April Please refer to Bursa Securities website for further details on the aforementioned proposals. 22. Available for sale financial assets Fair value of financial instruments Fair values recognised in the statement of financial position are measured using the following fair value hierarchy: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 Inputs other than quoted price included with level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derives from prices); and Level 3 Inputs for the asset or liability that are not based on observable market data (that is, observable inputs). A reconciliation from opening balances to fair value measurement on level 1 of the fair value hierarchy is as follows: RM mil RM mil At 1 January 81.0) 73.6) Addition -) 3.7) Disposal (86.5) -) Net gain transferred to equity 8.6) 3.7) At / ) 81.0) Less: Non-current portion (3.1) (3.4) Current portion -) 77.6)

25 MMC Corporation Berhad (30245-H) Page 25 of Borrowings RM mil RM mil Current - secured unsecured 743 1,087 1,347 1,495 Non-current - secured 4,526 5,482 - unsecured 2,952 2,069 7,478 7,551 Total borrowings 8,825 9,046 All the borrowings of the Group are denominated in Ringgit Malaysia. 24. Changes in material litigation a) Accolade Land Litigation A jointly controlled entity of MMC, MMC Gamuda KVMRT (PDP) Sdn Bhd ( KVMRT PDP ) was served with a Writ and Statement of Claim by Accolade Land Sdn Bhd ( Accolade ) on 24 June The suit is premised on an alleged breach of a contract between Accolade and Mass Rapid Transit Corporation Sdn Bhd ( MRT Corp ) relating to the acquisition of land belonging to Accolade by MRT Corp for the Klang Valley Mass Rapid Transit project in which KVMRT PDP was the Project Delivery Partner.

26 MMC Corporation Berhad (30245-H) Page 26 of 29 Accolade is claiming, jointly and severally against the four defendants in the suit, damages in the sum of RM303,534, with interest and costs. On 5 August 2016, KVMRT PDP filed an application to strike out Accolade s Writ and Statement of Claim. The other Defendants in the suit also filed their respective striking out applications. On 15 September 2016, KVMRT PDP filed a separate application to strike out parts of Accolade s Amended Reply to KVMRT PDP s Defence ( 2nd striking out application ). The striking out applications by KVMRT PDP were heard on 5 October 2016, 23 November 2016 and 28 February On 20 April 2017, the High Court ordered that Accolade s Writ and Statement of Claim be struck out with costs. Accolade filed its Notice of Appeal on 16 May 2017 to appeal to the Court of Appeal against the High Court s decision. Over the course of several case managements, parties informed the Court that they have yet to finalise the Record of Appeal as the High Court has not issued its grounds of judgment in respect of the Striking-Out Applications. At the case management on 18 January 2018, Accolade informed the Court of Appeal that the High Court had issued its grounds of judgment. Following from this, the Court fixed a final case management on 16 April 2018 to ensure that all court papers are filed before the appeal hearing on 24 April 2018.

27 MMC Corporation Berhad (30245-H) Page 27 of 29 b) Oil Spill Claim Pelabuhan Tanjung Pelepas Sdn Bhd ( PTP ), a 70% owned subsidiary of MMC Corporation Berhad, has filed an in rem action against the shipowners, Rising Star Shipping Sdn Bhd ( RSS ), and an in personam action against RSS and the insurers, The Shipowners Mutual Protection and Indemnity Association (Luxembourg) Singapore Branch ( the Club ), respectively on 18 July 2017 at the Kuala Lumpur High Court in relation to the oil spill at PTP s premises causing damages. The action stems from an oil spill incident of the vessel on 24 August 2016 where there was an overflow of oil from one of the vessel s tanks in the course of loading a cargo of 2,500 metric tons of marine fuel oil which subsequently spread into PTP s premises ( Oil Spill ). As a result, PTP suffered various substantial losses. PTP claims a sum of RM31,862, against RSS and the Club. RSS had earlier obtained an order of the Kuala Lumpur High Court to limit its liability in the Oil Spill to approximately RM25.9 million ( Limitation Amount ), as provided for under the Merchant Shipping (Liability and Compensation for Oil Pollution) Act 1994 ( Limitation Action ). The Club has lodged security for the Limitation Amount with the Kuala Lumpur High Court. Subsequently, the International Oil Pollution Compensation Fund 1992 was joined in the Limitation Action, to take up

28 MMC Corporation Berhad (30245-H) Page 28 of 29 further claims by parties affected by the Oil Spill beyond the value of the Limitation Amount. On 3 January 2018, the Kuala Lumpur High Court consolidated PTP s in personam action with the Limitation Action. Save as disclosed above, there has been no significant change in material litigation, including the status of pending material litigation in respect of the Company and its subsidiaries during the current quarter under review. 25. Dividend Payable A decision on the declaration of the final dividend for the financial year ended 31 December 2017 has yet to be made. 26. Earnings per ordinary share Basic Earnings Per Ordinary Share Cumulative Cumulative 3 months 3 months 12 months 12 months ended ended ended ended Profit for the financial year attributable to owners of the Parent (RM mil) Weighted average number of ordinary shares in issue ( mil) 3, , , ,045.1 Basic earnings per ordinary share (sen)

29 MMC Corporation Berhad (30245-H) Page 29 of Authorisation for issue The interim financial statements were authorised for issue by the Board of Directors in accordance with a resolution by the Directors as of 27 February By Order of the Board Ahmad Aznan Mohd Nawawi (L.S. No ) Sazlin Ayesha Abdul Samat (L.S. No ) Secretaries Kuala Lumpur 27 February 2018